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CalPERS requires contractors to disclose ties to agents

November 17, 2010 | 2:31
pm

A new policy approved Wednesday by the board of the state's biggest government pension fund will require all vendors seeking contracts to publicly disclose whether they are paying a third-party agent to seal the deal.

Beginning Dec. 1, most contractors must reveal how much they paid an agent and whether the agent had any family or financial relationships with current or former board members. They also need to identify all payments, gifts, loans and other valuable items offered to board members or staff at the California Public Employees' Retirement System.

"This is another step toward ensuring that our business decisions are open and transparent," said CalPERS board President Rob Feckner. "We want all information put on the table so that we can be certain all of our decisions are based solely on their merits."

The new policies are in line with a series of efforts by the board of the $221-billion fund. The process began early last year after an influence peddling and bribery scandal involving pension fund investments spread from New York state to New Mexico and California.

The board of CalPERS responded by requiring all private equity and real estate investment managers it partners with to disclose the identities of so-called placement agents that helped them secure business with the fund. The disclosures revealed that one of those agents, Alfred J.R. Villalobos, was paid more than $40 million in commissions by CalPERS' investment partners.

Villalobos and his Nevada-based company are the targets of a lawsuit by California Atty. Gen. Jerry Brown that alleges fraud, selling securities without a license and illegal gift giving.

On Jan. 1, a new state law takes effect that requires all placement agents at CalPERS to register as lobbyists.